Real estate, cybersecurity and other risks, economics, & more: links & commentary for May 4, 2019

Property Owners Protest Pipeline Procurement Process

“They’re making millions in profit, and we still haven’t gotten a dime,” Erb said in a phone interview. “They’re exploiting a broken system.”

Solar Energy Gaps Driven by Statehouses, Not the Sun

In the solar energy race, some of the sunniest states — Louisiana, Kansas and Texas, to name a few — are overshadowed by much dimmer ones, including Vermont, New Jersey and Massachusetts, according to a Center for Public Integrity data analysis.

… shifts in electricity generation are happening during a crucial time, research suggests. The global consortium of scientists with the United Nations Intergovernmental Panel on Climate Change says the key to avoiding catastrophic consequences of rising global temperatures is a swift move away from fossil fuels toward more renewable and efficient forms of energy.

“Severe climate change impacts … could be avoided by limiting global warming to 1.5 degrees Celsius, but the time to act is rapidly closing,” Caitlin Wiesen with the UN’s Development Program said last fall in Vietnam.

Renewables are projected to be the nation’s fastest-growing source of electricity in the coming years, according to the U.S. Energy Information Administration. Solar-generated electricity alone is expected to grow 32% at utilities and 44% at residential and small-scale operations by 2020.

But that’s starting from a small base. Less than 2% of U.S. electricity was solar powered last year. And the surge in that type of electricity generation is uneven because many states aren’t taking full advantage.

… challenges were magnified in 2013 after an analyst prepared a blunt and bleak report for the Edison Electric Institute, which represents the electric utility industry. The report warned that surging consumer interest, political will and technological breakthroughs had the potential to make customer-owned solar so economically successful, it could undermine the business of centralized electricity sales — an existential threat to the utility industry.

Millennials are pouring into these smaller cities and buying homes

In the majority of the top 10 millennial markets, the unemployment rate is lower than the national average, and home prices are generally lower. Based on average income, millennials in these markets can afford to buy 1 out of 4 homes listed for sale. In Oklahoma City, they can afford 30%. By comparison, millennials can afford just 10% of the homes in Dallas, 13% in Boston and barely 2% in San Diego.

Rentals work there too.

Millions of homes are underinsured against natural disasters as construction costs keep rising

In California, one of the regions studied, Corelogic identified 110,000 Southern California properties in very high to extreme risk of wildfire. With average reconstruction cost estimated at $400,000, the risk is more than $46 billion. Those costs are significantly higher than they were just two years ago because of a significant increase in the costs of labor and materials.

So if just 1% of the homes at risk were a complete loss in a wildfire, given the increase in reconstruction costs over the last two years (5.6%), the undervaluation of that 1% would be $25 million if insurance coverage is not current.

That’s good info. Let’s take it a bit further. Here’s just one example of many.

Extended Replacement Cost (ERC)

Provides an additional amount of insurance up to 20% of the Coverage A limit of liability. Must be insured to 100% of Replacement Cost.

Why might an applicant choose “Extended Replacement Cost (ERC)”?

Extending the replacement-cost limit will aid in:

1) covering 20% inflation of replacement costs to help avoid replacement-cost-coinsurance issues with inflation below 20%

2) covering more of any materials and supplies under COVERAGE A – DWELLING … 2.

3) covering more of any building equipment and outdoor equipment under COVERAGE A – DWELLING … 3.

4) increasing the amount of insurance available for OTHER COVERAGES that are a percentage of COVERAGE A, for example Other Structures; Rental Value and Additional Living Expense; and Trees, Shrubs and Other Plants

5) covering more of anything purchased during the policy and covered under COVERAGE A – DWELLING but where the limit was not increased via an endorsement.

Take note of this: “Must be insured to 100% of Replacement Cost.” Therefore, if construction costs rise but you don’t increase your limit to match, you could easily fall below the 100%, in which case the extra premium you’ve been paying for that “20% inflation of replacement costs” would be lost.

This is complicated material, and even insurance brokers have to occasionally refresh at this level of detail.

Loss Settlement. Covered property losses are settled as follows:

Buildings under Coverage A or B at replacement cost without deduction for depreciation [age, wear & tear, & obsolescence], subject to the following:

(1) If, at the time of loss, the amount of insurance in this policy on the damaged building is 80% or more of the full replacement cost of the building immediately before the loss, we will pay the cost to repair or replace, after application of deductible and without deduction for depreciation, but not more than the least of the following amounts:

(a) the limit of liability under this policy that applies to the building;

(b) the replacement cost of that part of the building damaged for like construction and use on the same premises; or

(c) the necessary amount actually spent to repair or replace the damaged building.

(2) If, at the time of loss, the amount of insurance in this policy on the damaged building is less than 80% of the full replacement cost of the building immediately before the loss, we will pay the greater of the following amounts, but not more than the limit of liability under this policy that applies to the building:

(a) the actual cash value of that part of the building damaged; or

(b) that proportion of the cost to repair or replace, after application of deductible and without deduction for depreciation, that part of the building damaged, which the total amount of insurance in this policy on the damaged building bears to 80% of the replacement cost of the building.

The following formula is used to determine (2)(b) above: (chosen dwelling limit ÷ 80% of the actual replacement value of the dwelling) x actual loss amount = loss payment. Of course, due to varying degrees of depreciation from property to property, actual cash values could be lower.


Dwelling limit: $150,000

Loss: $20,000

Dwelling replacement value: $250,000

$250,000 x .80 = $200,000

$150,000/$200,000 = .75

$20,000 x .75 = $15,000 loss payment

A $150,000 dwelling limit on a $250,000 replacement-cost dwelling (excluding land, etc.), cost the insured an additional $5,000 on a $20,000 loss.

If the dwelling has depreciated 50%: Actual cash value loss: $20,000 x .50 = $10,000

A $150,000 dwelling limit on a $250,000 replacement-cost dwelling with 50% age or other depreciation, cost the insured an additional $10,000 on a $20,000 loss.

To determine the amount of insurance required to equal 80% of the full replacement cost of the building immediately before the loss, do not include the value of:

(a) excavations, foundations, piers or any supports which are below the under surface of the lowest basement floor;

(b) those supports in (a) above which are below the surface of the ground inside the foundation walls, if there is no basement; and

(c) underground flues, pipes, wiring and drains.

You can see why keeping your limit above the 80% level pays after a loss. You pay more in premium for 80%+ than for a limit below 80%, but your loss payment (the money the insurance company pays you for a valid claim) can really take a hit if you fall below that 80%.

Asst. Prof. Amir Jina discusses how environment affects the way societies develop

Are there specific regions of the U.S. that should brace themselves more for economic hardship than others as a result of climate change?
One of the most surprising findings our research uncovered was the significant regional disparities in terms of responding and adapting to the effects of climate change. We know that places with lower average incomes are suffering more than their affluent neighbors and because U.S. counties in the South are, on average, poorer than counties in the North, their ability to manage the impact of climate change is tenuous. The fact that they face hotter temperatures on a more regular basis further exacerbates risk. In the North, rising temperatures are positive for things like better health. In the South, enhanced hurricanes and rising sea level caused by a hotter climate creates a perfect storm from which these communities may not be able to recover.

Climate change is a threat multiplier. We see a strong correlation between climate and conflict. In places where resources are scarce, political systems are unstable and cultural rifts exist; for example, climate change comes in and exacerbates all of that. We look a lot at crime and the rise in crime rates — from theft to homicide — that occur due to environmental exposures. This could become a major issue for countries as they evaluate how important climate change policies are and what level of response is necessary to ensure the safety and security of their citizens. It’s not just about dollars, but also about our sense of safety.

What do you think?

Rep Jayapal and Sen Sanders Have Introduced Medicare For All Bills: One Is a Lot Better Than the Other

Representative Jayapal’s bill, HR 1384, meets the definition of a single-payer bill as originally outlined in PNHP’s 1989 article and as most experts define the term. It contains the four elements of a single-payer system: It relies on one payer (HHS, not multiple payers called ACOs) to pay hospitals and doctors directly; and it authorizes budgets for hospitals, fee schedules for doctors, and price ceilings on prescription drugs.

Senator Sanders’ bill contains two of those four elements – fee schedules for doctors and limits on drug prices. That’s a good start. He should add the other two. He should get rid of Section 611(b), the section that authorizes ACOs, and thereby ensure HHS is the single payer. And he should add a section authorizing HHS to negotiate budgets with each of the nation’s hospitals.

Africa’s disappearing forests

The main problem areas are Brazil and Indonesia’s rainforests, which together account for 46%of primary rainforest loss in 2018. But this year researchers discovered a new disturbing development: trees in Africa are disappearing at an unprecedented rate. …

… important forests in West Africa which are producing oxygen and absorbing carbon and, in essence, making an enormous contribution in the mitigation of climate change ….

The love of money over everything else:

Lost world: UN report shows Nature at death’s door

Paris (AFP) – A landmark UN report on the state of Nature, obtained by AFP, makes for grim reading, showing how humanity has wreaked havoc with the environment.

The 1,800-page draft document, set to be finalised after a biodiversity summit in Paris this week, depicts a planet ravaged by rampant overconsumption and drowning in pollution, where hundreds of thousands of species risk extinction.

Here is a rundown of the report’s key findings, which read like a charge sheet against history’s most destructive creatures: ourselves.

Never store your user name and password in the clear or in the open. Always use two-factor authentication (2FA) when possible. Select the strongest method of 2FA possible too. Use strong passwords. Use a password generator to create complex passwords. Use a fully encrypted password manager. Don’t use the same password for more than one site. Here’s why:

Attackers are targeting GitHub, GitLab, and Bitbucket users, wiping code and commits from multiple repositories according to reports and leaving behind only a ransom note and a lot of questions.

Attackers Wiping GitHub and GitLab Repos, Leave Ransom Notes

PSA: If you’ve got a Dell computer, you might want to fix this now

Your new Windows laptop typically ships with an awful lot of bloatware you don’t need. Often, it’ll just slow down your computer a tad. But occasionally, a pre-installed piece of manufacturer cruft can pose a serious security risk — and that’s why you should probably update or uninstall Dell’s SupportAssist right away.

By the way, Dell’s SupportAssist is a huge resource hog.

These hackers are so nasty that when I saw the Firefox problem early today (Update Regarding Add-ons in Firefox), I wondered immediately if this exploit was involved. It turned out not, thankfully.

A mysterious hacker gang is on a supply-chain hacking spree

“There’s a constant evolution of their methods, and it’s growing in sophistication,” Kamluk says. “As time passes, it’s going to become harder and harder to catch these guys.”

Salt-Water Fish Extinction Seen By 2048

The apocalypse has a new date: 2048.
That’s when the world’s oceans will be empty of fish, predicts an international team of ecologists and economists. The cause: the disappearance of species due to overfishing, pollution, habitat loss, and climate change.

The study by Boris Worm, PhD, of Dalhousie University in Halifax, Nova Scotia, — with colleagues in the U.K., U.S., Sweden, and Panama — was an effort to understand what this loss of ocean species might mean to the world.

The researchers analyzed several different kinds of data. Even to these ecology-minded scientists, the results were an unpleasant surprise.

… the loss of species isn’t gradual. It’s happening fast — and getting faster ….

Over fishing? Considering how polluted the oceans are now, we better figure out how to feed people without serving up fish from those waters.

The Senate Resolution To Condemn MMT: …

MMT is an accurate model of how the economy works. It doesn’t have to lead to higher deficits (unlike Trump’s fake “trickle-down” corporate-tax cuts) or higher price inflation. The money can be created without borrowing, and the money created can be funneled into projects that increase the GDP more than the amount to fund them. It’s called the multiplier. Most politicians working for the plutocrats don’t know what that is.

Fed’s QE Unwind Continues at Full Speed in April

The Fed has already announced that it wants to bring down the average maturity of its Treasury holdings to the average maturity of total outstanding marketable Treasury securities. This will require that the Fed take on short-term bills, of which it has none at the moment, and get rid of a portion of its long-dated Treasury notes and bonds. The Fed’s stepping away from those long-dated maturities is likely to put upward pressure on the 10-year Treasury yield which would steepen the yield curve a wee bit. Sit tight for details, Powell said.

Three Things To Consider Before Investing In Any Multifamily Deal

Multi-family real estate investing is one of the hottest topics being pitched to investors now by real estate sponsors and operators (the people raising money for syndications) who are looking to raise capital. Making things even more promising, savvy investors have found vehicles such as self-directed IRAs to establish these private partnership and joint venture investments using tax-advantaged savings. To most, this is newfound money — and it is quickly finding its way to the alternative asset class such as real estate and venture capital.

… This article is uniquely written for those who want to understand the hard questions to ask someone who is soliciting you for an investment into a private placement or limited partnership opportunity.